The Budgetary Review and Recommendation Report of the Portfolio Committee on International Relations and Cooperation, dated 24 October 2012

1. Introduction

 

1.1   The role of the Committee

 

The Portfolio Committee on International Relations and Cooperation (the Committee) is a committee of Parliament mandated by the sections 55 & 92 of the Constitution of South Africa,[1] to oversee and ensure accountability in the formulation and conduct of South African foreign policy. Consequently, the Committee conducts oversight on activities of the Department of International Relations and Cooperation (the Department), its policies, financial spending patterns, administrative issues, and holds the Department accountable for its operations and functions. The Committee is an important mechanism for ensuring oversight and conduct of South Africaís international relations and cooperation policy.

 

In accordance with section 5 of the Money Bills Amendment Procedure and Related Matters Act No.9 of 2009, National Assembly, through its committees, must assess the annual performance of each national department and submit Budgetary Review and Recommendations Reports (BRRRs) for each department, for tabling in the National Assembly. These reports will be considered by the Committee on Appropriations when it is considers and reports on the Medium Term Budget Policy Statement (MTBPS) to the House.

 

In compiling this report, the Committee as mandated by section 5 of the Money Bills Amendment Procedures and Related Matters Act 2009, based the assessment of the Department in its service delivery plan as espoused in the 2011 State of the Nation Address. The Committee linked domestic priorities to the Departmentís Strategic Plan 2011 Ė 2014 and aligned the information to priorities and measurable objectives as set out in the strategic plan. The Committee examined the expenditure report as published by the National Treasury, commonly known as Section 32 Reports of the Public Finance Management Act (PFMA). Reference was also made to the Auditor-Generalís report on the 2011 Budget Vote and the Departmentís Annual Report, which contains the Departmentís service delivery information, reflecting its performance in 2011/12 reporting period.

 

 

1.2   The Legislative Mandate of the Department

 

The overall mandate of the Department is to work for the realization of South Africaís international relations policy objectives. In terms of the provisions of the Constitution, the President of the Republic of South Africa bears the overall responsibility for the countryís foreign policy and international relations[2]. However, the Department is entrusted with the formulation, promotion and execution of South Africaís foreign policy and with the daily conduct of its international relations. The Minister of International Relations and Cooperation assumes overall responsibility for all aspects of South Africaís international relations, albeit in consultation with the President. The Minister also liaises and consults with members of the Cabinet on overlapping issues and on the priorities and programmes of other departments that bear an international relations element. In the same breath, other Cabinet ministers are required to consult the Minister of International Relations and Cooperation on their international role.

 

2. Departmentís Strategic Priorities and Measurable Objectives

 

2.1 Strategic Plan of the Department

The Departmentís strategic objectives as prioritised in its 2011-14 Strategic Plan comprise the following broad points to enable the Department to fulfill its mandate:

  • Through bilateral and multilateral interactions, protect and promote South African national interests and values;
  • Conduct and co-ordinate South Africaís international relations and promote its international relations policy objectives;
  • Monitor international developments and advise government on international relations policyand related domestic matters;
  • Protect South Africaís sovereignty and territorial integrity;
  • Contribute to the formulation of international law and enhance respect for the provisions thereof;
  • Promote multilateralism to secure a rules based international system;
  • Maintain a modern, effective and excellence driven Department;
  • Provide consular services to South African nationals abroad and
  • Provide a world class and uniquely South African State Protocol service.

 

2.2 Measurable Objectives of the Department

 

The Strategic plan is categorized into 6 key priority areas for the reporting year, aimed at responding to the domestic priorities as announced by government for the reporting year as follows:

  • Enhancing the African Agenda and Sustainable Development;
  • Strengthening political and economic integration of the Southern African Development Community (SADC);
  • Strengthening of South-South Relations;
  • Strengthening of Relations with the formations of the North;
  • Strengthening of Political and Economic Relations;
  • Participation in the Global System of Governance.

During the reporting period, the thrust of the work of the Department remained anchored on these overarching priorities as confirmed by the January 2011 Cabinet Lekgotla and the 2011 State of the Nation Address (SONA). In its work on these priorities, the Department is supported by the following activities:

  • Organisational Support,;
  • Rendering of Professional Services and
  • Organisational Strengthening.

 

3. Analysis of the Departmentís Prevailing Strategic and Operational Plan

 

During the reporting period, the Department remained focused on ensuring that South Africaís foreign relations contribute to an environment that is conducive to sustainable economic growth and development, and serve as a basis for addressing governmentís identified urgent priorities. In support of governmentís key targets, outlined in the medium term strategic framework, the Departmentís priority will be to pursue African development and enhanced international cooperation.

In response to President Zumaís clarion call in his 2011 SONA for the alignment of the international relations policy to domestic priorities such as job creation and poverty alleviation, activities underlining economic diplomacy have been prominent. Quite evidently, President Zuma has led many delegations comprising the South African business fraternity to various countries in Africa, Asia and Europe. As a democratic developmental state, South Africa has a clearly articulated socio-economic programme, which it pursues through active state interventions and supportive institutional structures.

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In pursuing its mandate in respect of economic diplomacy, the Department continued to reflect a bias towards Africa, the SADC, and towards support for South-South formations. It is believed that economic diplomacy in the region will support an integrated development strategy for the Southern African Custom Union (SACU), SADC and the continent, which includes investment promotion and industrial development. For this policy to succeed there must be a close partnership with government, business and labour. It has been advocated by followers of foreign policy trends that economic diplomacy will attract foreign direct investment to South Africa and Africa.

 

The Department continued to operate in an uncertain international environment and budget constraints. It received a budget allocation of R5, 153 billion for the 2011/12 financial year after the adjustment estimates. The 2011/12 budget depicts an increase of R438 million in comparison to the 2010/11 budget allocation. The increase is attributable to an additional R200 million transferred from the Department of Environmental Affairs for the hosting of the 17th Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change, and savings from inflation-related adjustments with regard to a number of operational items. Environmental diplomacy has become one of the main international focus areas with serious consequences for the future of the climate change regime and domestic economies. During the reporting period, the Department spent 97,5 per cent of its appropriated allocation.

 

It operates in a dynamic environment that combines varying legislative and monetary regimes that impact on its foreign policy operations. South Africa maintains diplomatic relations with countries and organizations through 125 missions in 107 countries abroad, and through the accreditation of more than 160 countries and organizations resident in South Africa.

 

The Department executed its mandate against the background of an ever-changing political and economic environment. The international environment is characterized by major shifts in global political, economic, social and cultural dynamics that impacted on different parts of the world and include: the emergence of new economic powers; the new phenomenon of media and social networks; environmental change; heightened demand for scarce resources and the changing nature of conflict and insecurity. In order to survive in this environment, South Africa had to shape its domestic and foreign policies to respond to global drivers and trends.

During the reporting period, the global economic crisis continued to accelerate the shift in the balance of political and economic power towards the emerging economies. The trading patterns continued to shift to new markets, with notable growth in South-South trade between the emerging economies. The consequence of these changes resulted in the Department pursuing South Africaís interests in an environment of insecurity, uncertainty and unpredictability. However, the growth of the South African economy, in particular, and the African economy in general, continued to be increasingly linked to these emerging economic powers. That assisted South Africa to deal with the global economic downturn in an environment of negative growth rates in the economies of Northern trading partners.

 

One of the biggest changes witnessed during the reporting period occurred in the Middle East and North Africa regions. The so-called Ďthe Arab Springí hit across the Middle East and North Africa bringing about instability and humanitarian crises, where South Africa had to assist, among others, with humanitarian aid to the Sahel region, within the already limited resources.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Analysis of Section 32 Expenditure Reports

Vote 5: Department of International Relations and Cooperation (the Department)

 

Source: National Treasury

Expenditure trend: Summary

As at the end of the fourth quarter, the Department had spent R5.020 billion or 97.4 per cent of its adjusted or available budget of R5.153 billion. Under spending of R133.304 million or 2.6 per cent is mainly under goods and services under programmes 1 and 2. This was as a result of reprioritisation of funds within the baseline to cater for unfunded priorities through scaling down on missionsí operating expenditure and deferment of other funded projects. This was done mainly to cater for the budget shortfall for the hosting of the 17th United Nations Framework Convention on Climate Change (COP17/CMP7) and the African Diaspora Summit.

Programme spending trends

Figure 1: Comparison between actual and projected expenditure per programme

Source National Treasury

 

         Programme1: Administration: As at the end of the fourth quarter, the Administration programme had spent R1.162 billion or 93.8 per cent of its available budget of R1.239 billion. The under spending is mainly under payments for capital assets as a result of poor planning.

         Programme 2: International Relations and Cooperation: Total expenditure under this programme as at the end of the fourth quarter amounted to R2.551 billion or 98.1 per cent of its available budget of R2.610 billion. Although this programme has under spent by a marginal 1.9 per cent, it has over spent on its compensation of employees by over 20 per cent, of which details are included under the analysis of economic classification.

         Programme 3: Public Diplomacy and Protocol Services: As at the end of the fourth quarter this programme had spent R487.453 million or 98.6 per cent against its available budget of R494.402 million. Under spending is mainly under compensation of employees due to vacant posts. Although the programme has under spent its overall budget, goods and services recorded an over spending as a result of the late payments of invoices for the hosting of the 17th United Nations Framework Convention on Climate Change (COP17/CMP7) conference held in Durban during November/December 2011 and was processed on the Basic Accounting System (BAS) in January 2012.

         Programme 4: International Transfers: As at the end of the fourth quarter, this programme had spent R819.585 million or 100 per cent of its available budget of R819.585 million. Although spending has been slow in the first three quarters, spending of the total budget was achieved in this quarter because most of the transfers to foreign organisations and the African Renaissance Fund were made in March 2012.

Economic classification

Figure 2: Comparison of actual and projected expenditure by economic classification

Source National Treasury

 

As at the end of the fourth quarter, expenditure for the Department amounted to R5.020 billion or 97.4 per cent of its available budget of R5.153 billion. Under spending of R133.307 million or 2.6 per cent is mainly under goods and services in programmes 1 and 2 due to reprioritisation of funds and under payments for capital assets.

Current Payments: The Department spent R3.920 billion or 99.7 per cent of its available budget of R3.931 billion of current payments, under spending its budget by a marginal R11.533 million or 0.3 per cent.

         Compensation of employees: Spending on compensation of employees amounts to R1.934 billion or 116 per cent of the available budget of R1.666 billion. The over spending is as a result of a higher than budgeted for cost of living adjustment (COLA) for the locally recruited personnel under programmes 1 and 2.

         Goods and services: Spending on goods and services amounts to R1.934 billion or 88.4 per cent of its available budget of R2.193 billion. The under spending is attributable to a departmental reprioritisation of funds within the baseline. This was in order to fund the shortfall in the budget for costs associated with the hosting of the COP17/CMP7 conference in November to December 2011 and also realise savings that were to be spent on the African Diaspora summit.

         Other: a significant amount under other expenditure relates mainly to interest and rent on land which amounts to R46.995 million or 65.4 per cent of the available budget of R71.914 million.

         Transfers and subsidies spent R827.962 million or 100 per cent of its available budget of R827.680 million, including transfers to households. The international transfers to international organisations spent R819.588 million or 100 per cent of its final appropriation.

         Payments for capital assets: An amount of R230.603 million or 65.4 per cent was spent against the available budget of R352.639 million, under spending by R122 million or 34.6 per cent. The under spending is as a result of deferment of some projects to cater for the unfunded projects and is recorded mainly under machinery and equipment under the Administration programme.

         Payments for financial assets: A re-evaluation of the cash book resulted in the department realising R41.991 million which was used to augment budget pressures under operations.

Virements

The department made virements amounting to R9.645 million from goods and services under International Relations programme to International Transfers. Amounts of R207.538 million was also shifted between the Administration, International Relations and Public Diplomacy and Protocol Services programmes, mainly from savings under goods and services to compensation of employees and payments for capital assets.

2011 ENE non-financial performance as reported by departments or 4th quarter reports on the 2011 Annual Performance Plan

Some of the Departmental achievements in the fourth quarter include the following:

         Presentation to the 4th Brazil, Russia, India, China and South Africa (BRICS) Summit held in Delhi Declaration. The Department reflected relevant positions by the BRICSístates and South Africa provided a paragraph on the African agenda that further built on the Sanya pledge for support to Africa, that is, infrastructure development, skills development and transfer of technology.

         President Zuma reported to the 26th NEPADís Heads of State and Government Orientation Committee meeting on progress regarding the Presidential Infrastructure Championing Initiative (PICI) as part of the 18th Session of the African Union (AU) Summit held in Addis Ababa, in January 2012.

         Hosted an Extraordinary Meeting of the Double Troika and an Inter-State Politics and Defence Committee (ISPDC) on the SADC candidate for the African Union Commission (AUC), and provided feedback on Madagascar on which South Africa leads the Troika efforts.

         Hosted an Extraordinary SADC Double Troika ISPDC in February 2012 during which the intention of South Africaís candidature for the AUC Chair was re-endorsed.

         Hosted the United States/South Africa Annual Bilateral Forum (ABF) on 27 March 2012.


 

 

5. Analysis of the Departmentís Annual Report and Financial Statements

The Portfolio Committee on International Relations and Cooperation considered and analysed the Annual Report of the Department of International Relations and Cooperation for the 2011/12 financial year.

 

The focus of the assessment is on the performance of the key programmes of the Department comprising of Administration, International Relations and Cooperation, Public Diplomacy and International Transfers. The Departmentís performance is measured against its own set targets as identified in the Strategic Plan of 2011-2014. It is also measured against Governmentís key priorities identified in the Presidentís State of the Nation Address of February 2011 and the Governmentís Medium Term Strategic Framework 2010-2015. Other key measures comprise of the moral values and principles that underpin the countryís foreign policy. The source documents for this analysis include the 2011 Estimates of National Expenditure (ENE); the 2011 State of the Nation Address; the report of the Department of Monitoring and Evaluation; as well as the Departmentís Strategic Plan 2011-2014.The analysis gives special attention to Programme Two, International Relations and Cooperation, as it is the Programme which executes the core functions of the Department. The Departmentís African Renaissance and International Co-operation Fund report for 2011/12 is also assessed in this report.

 

It is important to mention that the Committee noted that the 2011-2014 Strategic Plan, as a basis for the Annual report, did not have ĎSMARTí objectives. As they are, the objectives make it very difficult to assess performance of the Department as they have no measurable outcomes, timeframes nor targets for service delivery. However, it was reported that the Auditor-General intervened before the Annual report was tabled, taking the management of the Department through a course to assist it to come up with ĎSMARTí objectives. The result has been that the report shows some improvements, whereas the linked Strategic plan remains not specific to targets.

 

 

 

 

 

 

 

5.1††††††† Performance per Programme

5.1.1 Programme One: Administration

Main objective: The Programme is responsible for overall policy development and management of the Department.

 

Achievements: Consular services were rendered to South Africans affected by among others, piracy and kidnappings in Somalia and Mali and arrests or imprisonment for various crimes abroad. The South African citizens arrested abroad for drug-related activities were put under the spotlight by the media. The increase in global tensions, threats of terrorist attacks and occurrence of natural disasters worldwide have emphasised the importance of South Africa having a dynamic consular service, to cater for a quick and coordinated response to situations that affect the safety, security and well-being of South Africans abroad.

 

The Department completed the construction of a new Chancery in Abuja, Nigeria and the embassy relocated to its new premises in July 2011. The Official Residence in London was renovated and the elevators in South Africa House were refurbished. The project to renovate and extend the Chancery in Washington progressed well, with relocation of the Mission to temporary office space and construction work to the state-owned facilities commencing in December 2011.

 

The Department also purchased an official Residence in Geneva, Switzerland. It continues to manage a two-pronged property portfolio, the international and local property portfolios. Locally is its head office which is under a public-private partnership (PPP); VIP facilities at the major international airports in South Africa; the Parliamentary Office in Cape Town and internationally 125 embassies abroad.

 

The Information and Communication Technology (ICT) programme saw the completion of the Voice over Internet Protocol (VOIP). This provides an integrated communications infrastructure for telephone, email and other applications between missions and head office. The financial statements were submitted on time as required by the National Treasury. The Department managed its cash flow in compliance with the Public Finance Management Act, 1999 (PFMA) requirements.

In response to President Zumaís call to assist with employment of the youth, the Department recruited 50 young unemployed graduates in a year-long internship programme.

A Youth Directorate has been established in the office of the Director-General in line with the National Youth Development Agency (NYDA) requirements, to advance the interests of the youth internationally. The Department filled 285 posts, 134 of which were internal promotions and 151 external appointments.

 

Challenges: However, the Auditor-General has granted a financially unqualified report with findings. The report and the Internal Audit raised questions with regard to the strategic objectives of the department in some incidents not being ĎSMARTí, and at times supply and chain management rules and regulations not being followed in procurement situations.

There is still no visible coherent link between South Africaís global engagements, national interest and domestic priorities. The raft of activities is sometimes diffuse and diverse in nature which does not always align to the domestic imperatives as noted in the mandate.

 

The Department was not able to complete the processes listed below despite their undertaking: the White Paper on Foreign Policy, Foreign Service Bill, processes for the establishment of the South African Development Agency (SADPA) and the establishment of the South African Council on International Relations (SACOIR). The percentage of women in senior management level is still very low, itís currently about 36 percent overall.

 

The Department continues to render agency services to other partner departments stationed abroad and also for delegations travelling abroad. These services included the payment of expenditure on behalf of other departments, as well as revenue collection and repatriation for the Department of Home Affairs. The missions have not been able to provide supporting documents, like copies of receipts, in some instances, leaving the Department unable to claim all the monies owed to it due to lack of proof of payment.

5.1.2 Programme Two: International Relations and Cooperation

Main objective: The function of this Programme is to promote bilateral and multilateral relations. It also facilitates the Departmentís participation in international organisations and institutions, in pursuit of South Africaís national values and foreign policy objectives.

 

Achievements: South Africaís 2nd term as a non permanent member on the United Nations Security Council (UNSC) for a two year term 2011-2012 and its Presidency of the UNSC for January 2012, led to the alignment of the African Union/United Nations (AU/UN) cooperation on peace support operations provided for under Resolution 2033. Resolution 2036 was also adopted, promoting cooperation between the UNSC and AU structures.

 

The UN tenure coincided with South Africaís term in the African Union Peace and Security Council and assuming a seat as the Chairperson of the SADC Troika. The positions in the UN and Africa reaffirmed commitments and actively positioned South Africaís contribution to critical debates related to the discourse on peace, security and stability in Africa. South Africa placed on the agenda, amongst others: security sector reforms and the protection of civilians in conflict.

 

South Africa successfully lobbied for the election of Dr Nkosazana Dlamini Zuma as Chairperson of the African Union Commission, to make a contribution towards unity and sustainable development in Africa. Funds were disbursed from the African Renaissance Fund (ARF) for nine projects in Niger, Congo, Democratic Republic of Congo (DRC), Somalia, Guinea-Bissau, Guinea-Conakry and other projects carried over from the previous year.

 

During the reporting period, South Africa was fully involved through SADC mediation and facilitation in Zimbabwe and Madagascar; seeking peace and a political solution in Libya; and continuing its leadership role in the Post-Conflict Reconstruction and Development (PCRD) process in Sudan, which made a small but a significant contribution to the creation of the 54th state in Africa, South Sudan. One of the highlights during the reporting period was the successful hosting of the historic COP17 in December 2011. The Presidency of South Africa secured the second commitment period of the Kyoto Protocol, a key outcome for Africa; and the making of history with the unanimous adoption of the Durban Platform for Enhanced Action, thus resetting the global environmental agenda.

 

In order to strengthen the political and economic integration of SADC, South Africa focused on the implementation and consolidation of the SADC Free Trade Area (FTA). It hosted and utilised the Common Market for Eastern and Southern Africa (COMESA)-East Africa Community (EAC)-SADC Summit in June 2011 to initiate the first phase of negotiations to create a new enlarged FTA between the three economic groupings. FTA could stimulate intra-regional trade, and such trade require infrastructure, hence President Zuma continued to champion the New Partnership for Africaís Development (NEPAD) Infrastructure Initiative.

 

In furtherance of the AUís all inclusive development agenda, a successful Global African Diaspora Conference was held on 25 May 2012. Significantly, this year, South Africa celebrated the milestone of the centenary of the oldest liberation movement in Africa, the African National Congress (ANC). South Africaís foreign policy has its roots in what the ANC stood for over the years; decolonisation, African unity and socio-economic upliftment of the people of Africa.

 

As part of the Brazil-Russia-India-China-South Africa (BRICS) forum, South Africa has been leveraging opportunities for its development agenda and deepening cooperation with the other emerging market economies. Trade with the BRICS countries has grown considerably, with activity with China surpassing trade activity with the traditional partners in the European Union (EU). Cabinet of South Africa has since adopted a BRICS strategy which will guide South Africaís participation in this forum. The BRICS countries have initiated a feasibility study for the establishment of the ĎBRICS Development bank. In the same breath, South Africa hosted the fifth India-Brazil-South Africa (IBSA) forumís summit in October 2011.

 

A total of 106 bilateral and multilateral agreements were signed during the reporting period. Of importance were those relating to space technology as a new race is developing for space science to be used for economic development purposes. Under the relations with the strategic countries of the North, the EU continued to be the strong partner to South Africa in terms of trade, tourism, investment, technical cooperation and development partnership. The 4th SA-EU summit was held on 15 September 2011 in South Africa.

 

The Agreement on Extended Health Cooperation with Cuba was signed in May 2012. This provided for an increase in South African medical students in Cuba, as well as Cuban doctors and academic staff deployed in South Africa. The Agreement on Economic Assistance to Cuba, is awaiting consideration for approval by the National Council of Provinces before it is ratified. The United States (US) administration will extend support through the Africa Growth and Opportunity Act (AGOA) and South Africa has successfully negotiated with the US an extension for continued financial transactions and oil imports with Iran

Challenges: There is a vast area of activities in which South Africa needs to participate. There is a greater risk of not having a focus area where delivery and impact of quick wins can be realised.

 

The Palestinian question remains unresolved, denying the establishment of a viable Palestinian state. South Africa needs to consolidate its policy in the Middle East in the aftermath of a wave of change in this region.

5.1.3†††† Programme Three: Public Diplomacy and Protocol

 

Main objective: Among the main tasks of the Programme is to provide an effective State Protocol service as well as to ďcommunicate an understanding of South Africaís foreign policy goals, positions, achievements and programmes at home and abroad.ĒThe programme has made noticeable strides in meeting its objectives.

 

Achievements: The Department has created accounts for new social media platforms to communicate and interact with a wider audience to intensify the understanding of foreign policy. These are: facebook, twitter, u-Tube and other publications. The number of diplomatic missions opening in Pretoria has increased from 278 in 2005, to 311 in 2012, with Azerbaijan, Fiji, Georgia and South Sudan being the latest additions to open such offices.

 

Challenges: Public diplomacy is seen as a methodology rather than a tool for advancing national interest. Every time there is a need for a virement, funds are diverted from these programmes as it is not such a priority.

 

6. Consideration of Reports of Committee on Public Accounts (SCOPA)

With reference to previous audit reports, SCOPA has made some observations relating to unauthorized expenditure in the 2006/7 financial year to the amount of R98, 918 million which is still awaiting authorization. The unauthorized expenditure related to the overspending of the vote or a main division within the vote. SCOPAís resolution on this case is still awaited.

 

There are no SCOPA resolutions for the reporting year 2011- 2012

 

 

 

7. Consideration of Other Sources of Information

 

7.1 The State-of-the-Nation address

 

 

The 2011 State of the Nation Address outlined a set of key strategic objectives to be pursued by the Department during the financial year 2011/12. There was a clear indication of continuity in policy perspective, regarding pursuit of economic diplomacy and aligning foreign policy to domestic priorities. Africa and SADC featured prominently for the realisation of a better Africa and a better world. While in 2010 the focus was on strengthening the structures of the African Union, the focus in 2011 had shifted largely towards economic integration and conflict resolution in the region and elsewhere in the continent. A change in emphasis was also with regard to NEPAD. In 2010, the objective was to ífocus energy in revitalising NEPADí, in 2011 specific focus was on the Ďimplementation of its infrastructure programme of which South Africa is championing the North-South infrastructure development corridorí. It became very clear that the government is focused on addressing domestic imperatives through its partnerships with the countries of the North.

 

 

7.2 Report of the Auditor-General of South Africa, the Financial and Fiscal Commission

 

The Auditor-Generalís audit opinion from 2010/11 has remained unchanged in 2011/12 reporting year. The office has expressed an unqualified audit opinion with findings on the pre-determined objectives for the periods 2010/11 and 2011/12, hence there was a regression in audit opinion from clean in 2009/10 to Ďunqualified with findings on pre-determined objectives and/or compliance with laws and regulations as follows:

a.       Goods and services with a transaction value between R10 000 and R500 000 were procured without inviting at least three written price quotations from prospective suppliers as per supply chain management rules.

b.       The financial statements and other information which were to be included in the 2011/12 annual report were not checked for completeness and accuracy before submission for audit.

c.       Indicators on the performance information were not well defined and targets not specific and measurable.

d.       The management of the Department did not report on progress made in achieving measurable objectives to the executive authority on a quarterly basis as required.

e.       Financial statements were submitted for auditing having not been prepared in all material aspects in accordance to all accounting standards. These were subsequently corrected.

f.         Employees performed remunerative work outside their employment without written permission from the relevant authority as legally required.

g.       Awards were made to suppliers who did not submit tax certificates for compliance.

h.       The usefulness of the annual performance report was put in doubt as performance targets were neither specific nor measurable; performance indicators were neither verifiable nor well defined.

i.         The Accounting officer did not ensure the existence of transparent systems of internal control, showing performance plans monitoring systems and reporting details to measure output

j.         Payments due to creditors were not often settled within 30 days from receipt of an invoice as required by the Public Finance Management Act, 1999 (PFMA).

k.       Leadership and accounting officer needs to improve the level of oversight responsibility on reporting and compliance with regulations at all times.

l.         Leadership should regularly review management reporting best practices, mentioned practices failed to detect misstatements of financial statements and performance information submitted for audit.

m.     The asset management information was not regularly updated for completeness and accuracy.

It may be appropriate for the Department to address the concerns raised by the Auditor-General and state how it aims to ensure that these problems do not recur. A report back to the Committee is crucial as this is the second time laxity with office procedures has been reported.

 

The African Renaissance and International Cooperation Fund (ARF):

The purpose of the ARF is to promote economic cooperation between the Republic of South Africa and other countries. This is achieved through granting and/or rendering of other financial assistance in respect of post conflict development projects in such countries.

 

An amount of R 450, 370 million for 2011/12 was budgeted for transfers to the Departmentís public entity, the African Renaissance Fund.

 

The Auditor-General has pointed out that as the ARF is a Schedule 3A public entity, hence it has been recommended that a separate accounting system be acquired for the entity. The Fund financed the following seven projects during the report period:

  • Technical assistance to the mandate of the UN Independent Expert on Human Rights and Extreme Poverty (R1,5 million);
  • Improvement of veterinary laboratory capacities in Sub-Saharan African countries funded through the International Atomic Energy Agency (R15 million);
  • South Africaís international diplomatic training programme (R13,5 million);
  • The Cuba economic aid package (R100 million);
  • Participation in AU/SADC electoral observer missions (R5 million);
  • Humanitarian assistance to Somalia (R10,6 million); and the
  • Electoral assistance to the DRC (R126 million).

 

The Auditor-General pronounced unqualified audit opinion with material findings on the performance of the Fund as follows:

  1. In the annual performance report, the performance targets are not specific in clearly identifying the nature and required level of performance.
  2. The accounting officer did not report on progress made in achieving measurable objectives.
  3. The strategic plan for 2011-2014, for the Fund has not been submitted to Treasury as required. The Department argued that by nature of the Fundís mandate, itís not visible to plan ahead what assistance will be required.
  4. Documented and implemented policies and procedures are not sufficiently monitored to ensure that the operations of the entity comply with relevant laws.
  5. Due to the urgency of some projects as well as the lengthy process to be followed to finalise the projects, the Department had to use its own funds while awaiting a letter of concurrence from the Minister of Finance. The arrangement poses a risk to the Department, as the amount owed by the Fund is not enforceable in the event that the Minister of Finance does not issue the letter of concurrence.

It is important for the Department to iron out outstanding issues relating to proper management of the ARF before SADPA comes into place to ensure seamless transition and smooth start by the envisaged agency.

 

7.3 Source:The Department of Performance Monitoring and Evaluation

 

The assessment by the Department of Performance Monitoring and Evaluation has the same results as the Auditor-Generalís report.

 

 

8. Committeeís Observations

 

  1. The report has covered an array of achievements and activities, but there is little detail attached to the reporting. In order to understand how these activities and engagements, (for example, participating in the senior officials meetings on SADC Customs Union), met targeted outcomes. The report does not say much in terms of how these activities assisted the Department in achieving its mission and goals.
  2. A more detailed analysis to the activities and engagements would enable a more in depth assessment to determine how the activities conformed to financial obligations, and more importantly with key deliverables under each key priority area for the period under review.
  3. There are notable achievements, but the bulk of the actual performance against set targets suggests some of the activities are merely public relations (PR) exercises as there are no mentioned outcomes, (Ministerís meeting with the Vatican in May 2011).
  4. South Africaís contribution to peace, security and stability on the continent continued to grow considerably. The country has been supporting the African Union, United Nations and SADC efforts aimed at bringing peace.
  5. Some of the targets are very broad and not clear how they intersect with South Africaís national interest or domestic priorities. As such it becomes very difficult to measure deliverables.
  6. The changing world order dictates that economic diplomacy is the key driver for addressing domestic challenges. It is not clear in the report whether the Department has prioritized this concept as a strategic tool for aligning foreign policy to domestic imperatives. There is no reported link between the business delegations undertaken to programmes for the benefit of the poor in South Africa.
  7. The public diplomacy programme is still facing challenges as a tool for communicating South Africaís foreign policy both locally and internationally. The set of activities characterized under this programme are more to do with the tools used for people to access information, such as facebook, twitter, and internet. Public diplomacy is more than that. There is no clear statement of objectives regarding a strategy with intended outcomes which would for instance, address perceptions that South Africa punches above its weight; has tendencies of a hegemon state; why South Africaís development cooperation, when SADPA does come into operation, is important to the strategic priorities; and why South Africa contributed the sum of US$2billion to the International Monetary Fund (IMF) fire wall emergency fund.
  8. South Africaís targeted strategies seem to be aimed at getting a seat at the table or going for positional leadership opportunities in formations such as BRICS, G20, and the UNSC. The substantial issues such as how these positions can be used to contribute to some of the debates on substantially reforming the global architecture, is unclear.
  9. The successful outcome of COP17 in Durban would not have been realized without the able stewardship of Minister Maite Nkoana-Mashabane. The South African delegation worked very hard to make the Durban conference a worthwhile experience with a lasting legacy in climate change issues.
  10. Some of the artifacts and manuscripts were saved from destruction by the rebel groups in Mali who attacked and destroyed the Timbuktu monument whose construction was funded under the ARF.
  11. The BRICS countries have commenced a feasibility study into the creation of a BRICS bank. The bank will be funded by the member states of the formation.
  12. The next catalyst for economic development in the world will be space economy. South Africa has the intellectual acumen to handle space technology; hence it won the bid for the Sky Kilometer Array (SKA).
  13. The Auditor-Generalís audit findings for 2011/12 remained unchanged in the 2011/12 reporting period. The recommended steps needed as stipulated in the 2010/11 Auditor-Generalís report and the Committeeís recommendations in its 2011 report were not fully addressed by the Department.
  14. A new unit has been formed under the office of the Director-General to monitor compliance with the Auditor-Generalís concerns. Also established is a Youth directorate aimed at advancing the interest of the youth internationally.
  15. It became apparent that in some instances, the Department commits funds to secure services before the necessary procedures for disbursement are completed. The common result is a Ďdeviationí from the normal practice and itís very risky as it creates an unauthorised expenditure.
  16. Some important processes which the Department had undertaken to table during the 2011/12 reporting year, such as the SADPA bill, Foreign Service bill, establishment of the South African Council on International Relations (SACOIR), have not yet made it to the gates of Parliament.

 

9. Conclusion

Overall performance by the Department in the reporting year has been satisfactory. The Committee is encouraged by the efforts undertaken to contribute towards improving lives of fellow South Africans; a stable and secure continent; and creating a better world for all.

 

The Committee is so far satisfied that the Department has utilized its budget in accordance with its plans for 2011/12. A lot of significant achievements were reported, and some concerns raised which show there is still room for improvement. The issues raised by the Auditor-General warrant undivided attention of the Accounting officer to ensure that there is no recurrence. There will always be room for improvement. The Committee regards this as work in progress and the Department should make the necessary adjustments in service delivery where needed.

 

10. Recommendations

The Committee is of the opinion that overall the Department has performed according to the goals it had set itself for the 2011/12 reporting period. The 2011/12 budgetary allocations of the Department were generally aligned to the national strategic priorities outlined in the 2011 State of the Nation Address, as well as its strategic direction in terms of its Medium Term Expenditure Framework. The unqualified audit report with findings, when rectified, will still be a positive indication of commitment of purpose by the Department to diligently execute its mandate.

 

The Committee acknowledges that in general there are challenges facing the Department which can have a bearing on its service delivery programs. In the midst of the international environment of a global meltdown, the missions abroad have to deal with decreased support for developmental assistance from cooperating partners.

 

The unpredictable foreign exchange portfolios, have been negatively affecting the operations of the Department, especially in the missions, where the bulk of its activities take place.

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In order to further assist the Department to enhance its performance, the Committee recommends that the Minister ensures that the Department implements the following and report to the Committee within three months of the publication of this report:

1)       In pursuit of the African Renaissance Fund activities in Africa and elsewhere, and in the context of Post Conflict Reconstruction and Development (PCRD), the Department should conduct a review of its involvement on the continent to draw lessons and identify areas of focus for future engagements under the ARF or SADPA when it takes over.

2)       In its multilateral engagements, the Department should seek funding for the operationalisation of the NEPAD Presidential Infrastructure Initiative in order to create jobs and improve the lives of the poor in South Africa.

3)       There should be regular physical verification of all assets globally, as well as continuous update of the Asset register to ensure its accuracy and completeness.

4)       A refresher workshop for middle and senior management on creation of ĎSMARTí objectives and targets; supply chain management; asset management and property management would be of benefit for future compliance with audit requirements.

5)       Performance contracts should be signed as required and assessments must be completed for all senior management staff to be able to fairly distribute performance dues and also to gauge the performance of this level of officers that they are able to deliver on the mandate as required.

6)       In the light of recent natural and man-made disasters, there is a need for a continuous and vigorous popularization campaign for ĎROSAí, in order to be informed of the presence of South African citizens in areas of accreditation.

7)       Training of internal language personnel could reduce spending on secured external consultants for translation of documents and communication with foreign missions. Security of information should also be considered. A deliberate programme for learning languages of the countries of the South, especially Mandarin, should be adopted, as China is becoming South Africaís biggest trading partner.

8)       The predisposition towards Africa and the countries in the South should find expression in the strategic objectives of the Department, with targets and outcome indicators.

9)       Public diplomacy should keep the world and the country abreast of what constitutes South African foreign policy through proactive information packages of decisions to be taken, or immediately after they have been communicated.

10)   The Department should give regular updates regarding performance of missions abroad for the Committee to monitor alignment of the mandate to domestic priorities.

11)   A regular update on the activities of the Youth directorate should be made to the Committee.

12)   Research and development should be strengthened in order for South Africa to be able to assess emerging trends and develop appropriate responses; such as a policy for the changing MENA region, BRICS Strategy, development cooperation and the role of SACOIR.

13)   Regular consultations, engagements and lobbying of the permanent five countries in the UN Security Council is of great importance. Seeking a common ground with the African Group in the UN Security Council is paramount for the Departmentís prevalence in the Council.

14)   A coordination mechanism should be created between departments for identifying which strategic organizations should be targeted to field South Africans for available positions.

15)   The Department should cooperate with Committee in shaping the route of international discourse where issues of national interest feature.

16)   There should be feedback on the Departmentís response to the Auditor-Generalís report with findings.

17)   The Department should report, on a quarterly basis, progress with regard to points 1,2,3,6 and 7 above.

 

Report to be considered.

 

 

 

 

 

 

 

 

 

 

 

 

 

Sources

 

ß         Annual Report 2011- 2012 Department of International Relations and Cooperation.

ß         Strategic Plan, 2011- 2014, Department of International Relations and Cooperation.

ß         Treasury, Vote: International Relations and Cooperation, Estimates of National Expenditure 2011.

ß         Zuma, J.G. 2011, State of the Nation Address at the Joint Sitting of Parliament. Cape Town.

ß         The African Renaissance and International Cooperation Fund Act 2000

ß         Assessment of the performance of the Department of International Relations and Cooperation, by the Department of Monitoring and Evaluation- The Presidency.

 

 



[1] Constitution of the Republic of South Africa 1996

[2] Department of International Relations and Cooperation, Strategic Plan 2011/14, p8